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The Oracle: NEPA, PHCN, DISCOs: How Nigerians Pay for Darkness (Pt. 1)

Published

4 years ago

June 11, 2022

Eric

By Mike Ozekhome

INTRODUCTION

THE PHCN OR NEPA

The Power Holding Company of Nigeria (PHCN), formerly known as National Electric Power Authority (NEPA), is an, organization in charge of electricity in Nigeria. The electricity sector in Nigeria currently generates, transmits and distributes megawatts of electric power that is significantly lower than what Nigeria’s required household and industrial needs. In 2012, the industry had labored to distribute a mere 5,000 megawatts, very much less than the 40,000 megawatts needed to sustain the basic needs of the population.

HOW MUCH LIGHT DO WE HAVE?

Nigeria is endowed with large oil, gas, hydro and solar resources, and it has the potential to generate 12,522 MW of electric power from existing plants. This is the estimated quantum of electricity that Nigeria ought to be producing daily with all our numerous endowments. Unfortunately, on most days, we are only able to dispatch approximately 4,000 MW, which is insufficient for a country of over 215 million people (by UN projection), a country boasts of numerous businesses and infrastructures.

MANY SOURCES OF POWER IN NIGERIA

In Nigeria, there are four major sources through which power is provided: coal, hydro, oil (petroleum) and natural gas. Among these, the whole energy sector is dependent only on petroleum, a factor that slows down the production of electricity and development in alternative forms of energy. 45% of the Nigerian population is currently connected to the energy National grid. However, the grid only supplies energy about 85% of the time; and is virtually nonexistent in many parts of Nigeria.

After the privatization of electricity in Nigeria, the transmission and supply of power in Nigeria were divided amongst several companies with different functions. The Generating Companies (GenCos) are those in charge of the actual generation of the electricity; transmission and distribution are left to the Transmission Company of Nigeria (TCN), and the Distribution Companies (DisCos), respectively. The GenCos are tasked with transforming hydro and gas power into electricity power.

HISTORY OF ELECTRICITY GENERATION IN NIGERIA

Electricity was first generated in Nigeria in 1866, when two generating sets were installed in the Colony of Lagos. However, the first electric utility company in Nigeria known as the Nigerian Electricity Supply Company (NESC) was established in 1929. In 1951, the Nigerian government by an Act of Parliament, established the Electricity Commission of Nigeria (ECN), to regulate and operate power supply in Nigeria.

THE EVOLUTION AND REVOLUTION

As part of the evolution in the Power Industry in Nigeria, the Federal Government by Decree No. 24 of 1972, created the National Electric Power Authority (NEPA). This was consequent upon the merger of the Electricity Corporation of Nigeria (ECN) and Niger Dams Authority (NDA). In September, 1990, the partial commercialization came into being with the appointment of a Managing Director/Chief Executive to superintend over the Corporation. Also, the Authority was divided into four autonomous divisions namely: Generation and Transmission; Distribution and Sales; Engineering; Finance and Administration. Each division was headed by an Executive Director.

By the year 2000, a state-owned monopoly, the National Electric Power Authority (NEPA), was put in charge of the generation, transmission and distribution of electric power in Nigeria. NEPA operated as a vertical integrated utility company and had a total generation capacity of about 6, 200 MW from 2 hydro and 4 thermal power plants. This ended up becoming a problem as there was unstable and unreliable electric power supply situation in the country with consumers frequently exposed to power cuts and long period of power outages. It was an industry characterised by lack of maintenance of power infrastructure, outdated power plants, low revenues, high losses, power theft and non-cost reflective tariffs.

In 2001, the reform of the electricity sector began with the promulgation of the National Electric Power Policy which had as its goal as the establishment of an efficient electricity market in Nigeria. It had the overall objective of transferring the ownership and management of the infrastructure and assets of the electricity industry to the private sector with the consequent creation of all the necessary structures required to forming and sustaining an electricity market in Nigeria.

The Federal Government of Nigeria (FGN) thus took further steps towards the Restructuring of the Nigerian Power Sector to establish an electricity supply that is efficient, reliable and cost-effective throughout the country and which will attract private investment. Subsequently, another Power Sector Reform Act was enacted in 2005, transferring the public monopoly of NEPA to Power Holding Company of Nigeria (PHCN) which was unbundled into 18 Business Units (BU); viz eleven (11) Distribution companies:- six (6) Generation companies and one (1) Transmission company .

The Transmission Company of Nigeria (TCN) is one of the successors of the unbundled PHCN and is currently an asset held under the custodianship of the Federal Ministry of Power. It will initially remain publicly owned. TCN has the responsibility for the management of operation, maintenance and expansion of the 132kV and 330kV transmission system. The Bureau of Public Enterprise (BPE) recently appointed a Management Contractor, Manitoba Hydro International (MHI) for TCN which took over the functions of Transmission Service Provider, System Operator and Market Operator to undertake the overall management of TCN.

System Operations (SO) function was established as a sector within the defunct Power Holding Company of Nigeria under t he Transmission sector. The SO has now evolved into a semi-autonomous sector under TCN and upon acquiring its license would operate as an independent company in future. The main responsibility of the System Operator is to operate the transmission system and the connected installed generation in a safe and reliable manner. SO is also responsible for the overall security and reliability of the grid system, economic dispatch of available generation resources and maintaining system stability. SO has seven functional departments namely; Operations/Control, System Planning, SCADA, Communications, Technical Services, Transitional Electricity Market and System Performance. SO is headed by the Executive Director (System Operation). The operational control hierarchy is as follows:

National Control Centre (NCC), Osogbo
Three (3) Regional Control Centres (RCCs) at Shiroro, Ikeja West and Benin. With proposed control centres at Kano, Alaoji and Gombe
Eight (8) Regional Operations Cordinating units (ROCs) at Benin, Enugu, Port-Harcourt, Bauchi, Kaduna, Shiroro, Osogbo and Lagos – several Area Control Centres covering 330kV and 132kV substations which fall under the supervision of the ROCs.

The mission statement was exercising grid control to maintain an efficient, coordinated and economic supply of electricity in accordance with the grid code and operational procedures. The vision was to operate the grid system efficiently to ensure open access, safe, reliable and economic electricity supply

In 2005, the Electric Power Sector Reform (EPSR) Act was enacted and the Nigerian Electricity Regulatory Commission (NERC) was established as an independent regulatory body for the electricity industry in Nigeria. In addition, the Power Holding Company of Nigeria (PHCN) was formed as a transitional corporation that comprises of the 18 successor companies (6 generating companies, 11 distribution companies and transmission company), all created from NEPA.

In 2O10, the Nigerian Bulk Electricity Trading Plc (NBET) was established as a credible off-taker of electric power from generation companies. By November 2013, the privatisation of all generation and 10 distribution companies was completed, with the Federal Government retaining the ownership of the transmission company. The privitisation of the 11th distribution company was completed in November 2014.

Nigeria, known to have Africa’s largest economy, has one of the world’s worst power sectors, producing an average of 5,000 megawatts of electricity for a population of about 200 million since the establishment of its electricity institutions. According to World Bank Report, over 80 million people do not have access to the national grid; and power shortages cost the country $29 billion. By comparison, South Africa, the continent’s second biggest economy, generates about 55,000 megawatts for a population of only about 58 million. Successive governments have tried, but failed to reform Nigeria’s energy sector. The main problems are decaying infrastructure, low investment, debts, and poor management. There are also “operational inefficiencies”, so said PricewaterhouseCoopers (PwC), in a 2020 report.

THE OPERATION OF THE POWER SECTOR

TRANSMISSION

The Transmission Company of Nigeria (TCN) manages the electricity transmission network in the country. It is one of the 18 companies that was unbundled from the defunct Power Holding Company of Nigeria (PHCN) in April 2004 and is a product of a merger of the transmission and system operations parts of PHCN. It was incorporated in November 2005 and issued a transmission licence on July 1, 2006. The TCN is presently fully owned and operated by the government and as part of the reform programme of the government, it is to be reorganised and restructured to improve its reliability and expand its capacity.

TCN’s licensed activities include electricity transmission, system operation and electricity trading. It is responsible for evacuating electric power generated by the electricity generating companies (GenCos) and wheeling it to distribution companies (DisCos). It provides the vital transmission infrastructure between the GenCos and the DisCos’ Feeder Sub-stations. TCN consists of three operational departments:

TRANSMISSION SERVICE PROVIDER (TSP)

The TSP oversees the development and maintenance of the transmission infrastructure. It is responsible for the national inter-connected transmission system of substations and power lines and providing open access transmission services. Its role is to maintain the physical infrastructure that make up the transmission grid and expand it to new areas.

SYSTEM OPERATIONS (SO)

The SO manages the flow of electricity throughout the power system from generation to distribution companies. It operates the Grid Code for the Nigerian Electricity Supply Industry (NESI). The SO has the responsibility for ensuring that the transmission grid lines are reliable and maintaining the technical stability of the grid through its operations of planning, dispatch, and control of the electricity on the grid.

MARKET OPERATIONS (MO)

The MO administers the market rules of the NESI. It is responsible for the administration of the Electricity Market and promoting efficiency in the market. Specifically, the roles of MO include implementing and administering the Nigerian Electricity Market Rules;

drafting and implementing the Market Procedures;

administration of the Commercial Metering System by ensuring that each trading point has adequate metering systems in place;

administration of the Market Settlement System;

Administration of the Payment System and commercial arrangement of the energy market, including Ancillary Services;

supervising Electricity Market Participants’ compliance with and enforcing the Market Rules and the Grid Code. The functions also encompass

periodic reporting on the implementation of the Market Rules;

capacity building of market of Participants on the Market Rules and Procedures and Trading Arrangements, finally,

At the long-term stage of the electricity market, of the MO is to ensuring and promoted competition among market participants.

THOUGHT FOR THE WEEK

“Good governance, safety, a chance to grow economically and professionally – those are important things”. (Dana Perino).

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Makinde Meets Tinubu, Insists on Membership of PDP

Published

4 hours ago

January 23, 2026

Eric

Oyo State governor, Seyi Makinde, has declared that he is not dumping the Peoples Democratic Party (PDP) despite the recent wave of defections in his party.

Makinde said this after meeting with President Bola Tinubu at the Presidential Villa in Abuja on Thursday.

When asked if he’s also considering joining the ruling All Progressives Congress (APC), like his former colleagues in the Peoples Democratic Party (PDP), Makinde said he is comfortable with the PDP.

“I am comfortable in the PDP,” he stated.

Makinde maintained that addressing Nigerian problems requires bi-partisan approach with contributions from all political parties in the interest of the country.

“We may have issues in this country where you need a bipartisan approach, where there won’t be an issue of APC talking alone or PDP talking alone; where we will have to look at what is the best foot forward in the interest of our nation. So, when you get to that junction, you need everybody on board,” he said.

The Oyo governor arrived at the Aso Villa shortly after Plateau State governor, Caleb Mutfwang, who recently defected from the PDP to the ruling All Progressives Congress (APC).

Both governors were received separately and proceeded to the president’s office.

Makinde was a key member of the group of five PDP governors, popularly known as the G5, who opposed the emergence of former Vice President Atiku Abubakar as the party’s presidential candidate ahead of the 2023 general election.

The G5 governors argued that the PDP had violated its informal zoning arrangement by presenting a northern candidate after the eight-year tenure of former President Muhammadu Buhari, who is also from the North.

The group maintained that power should rotate to the South in the interest of fairness and national cohesion.

During the 2023 presidential election, Makinde and other members of the G5 openly worked against the PDP candidate and supported Tinubu, who eventually won. Other members of the G5 included former Rivers State governor, Nyesom Wike; former Benue State governor, Samuel Ortom; former Enugu State governor, Ifeanyi Ugwuanyi; and former Abia State governor, Okezie Ikpeazu.

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Apapa Tanker Accident: Scooping Spilled Fuel is Suicidal, Sanwo-Olu Warns Lagos Residents

Published

3 days ago

January 20, 2026

Eric

Governor Babajide Sanwo-Olu has described the scooping of fuel by residents at the Apapa Bridge as a “suicide mission,” warning that the Lagos State Government will intensify enforcement to prevent actions capable of triggering mass casualties.

Sanwo-Olu spoke on Monday at the signing of the 2026 Appropriation Bill at the Lagos House, Ikeja, shortly after reports emerged of residents rushing to scoop spilled fuel from a tanker incident at Apapa.

He expressed disappointment at the conduct, stressing that such behaviour places lives at grave risk.

The governor commended the swift intervention of Lagos first responders and the police, who cordoned off the area and brought the situation under control before any explosion or disaster could occur.

He cautioned residents to desist from reckless acts, noting that the State would “leave no stone unturned” in safeguarding lives and property.

Linking the incident to broader issues of indiscipline, Sanwo-Olu said the government would enforce tougher penalties against environmental and safety violations, including indiscriminate dumping of refuse on road medians.

He disclosed that the 2026 budget makes provisions to strengthen the capacity of the Lagos Waste Management Authority (LAWMA) and private sector participants, with plans to expand compactor truck fleets and deploy additional equipment.

“We have instructed LAWMA not only to apprehend offenders but also to ensure they are charged for environmental violations,” the governor said.

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2027: Oyegun Welcomes Edo Obidient Movement into ADC

Published

3 days ago

January 20, 2026

Eric

National Leader of the African Democratic Congress (ADC), Chief John Oyegun, on Monday, said a new Nigeria is possible with the calibre of people joining the party.

Oyegun spoke in Benin at the mass entry of the members of the Obidient Movement into the ADC.

The former Chairman of the All Progressives Congress stressed that the Obedient Movement’s entry into the party in the State is a sign that the people are ready to join the struggle for a leadership change.

Oyegun, who noted that he is happy that the Obidient movement is joining the ADC, added: “A new Nigeria is truly possible. A few days ago, I was in the hall when a colourful and important personality, Dele Momodu, joined us.

“Today is the first time I saw youths who were committed to the nation-building. It is my first time meeting members of the Obidient Movement in this number. We are convinced that the youth of this country are ready.

“You have decided to take up the struggle yourself by joining the ADC. I am happy. I want to say that from the day the coalition came together, I have been convinced that we are on the right path.”

“I am sure you are not happy with what is happening in Nigeria and Edo State. Remember that the chairman said our one target is to save the country. We must start to make sure that, through the ADC, we make a new Nigeria possible.”

The State coordinator of Obidient Movement, Asemota Idiogbe, described ADC as the right party to battle APC in Edo and Nigeria.

He stated that he expects Peter Obi to become the party’s flagbearer and, eventually, the president of the country.

He said: “This is the right party to battle the APC in Edo and Nigeria. The ADC will take over Edo and the country. We expect Peter Obi to be the president. We are here to improve the party, not to ask for positions.

“We will influence the masses to vote for the ADC. The party is for people who want a better Nigeria. I want to let you know that the current leaders were the ones who made the Labour Party thick. Now that we have fused into the ADC, Labour is no more.

“We don’t share money to mobilise people. We are self-funded. Some of those who won on our platform betrayed us and joined the APC.”

State Chairman of the party, Kenneth Odion, commended the Obidient Movement for joining the ADC, noting that the party was poised to do well in the next election.